The upside to B20

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HELOCs, which is now limited to 65 per cent on the HELOC portion as a result of B20.

Prior to B20, we did not have stated TDS and GDS ratios in our alternative lending policy. Consequently, our underwriting policy will now include TDS and GDS ratio limits for our alternative lending products. These limits will be significantly higher than "A" lending requirements as our main focus will continue to be on ensuring affordability for the borrower.

B20 does state that if a lender advances a “non-conforming mortgage,” the LTV is limited to 65 per cent. At Optimum Mortgage, a non-conforming mortgage is one where a borrower has either (or both) a lower-than-average beacon score and/or the borrower’s ability to service the proposed debt cannot be confirmed to our satisfaction. Defining a non-conforming mortgage beyond this is difficult at this time.  We suggest brokers work with our business development managers and underwriters on a case-by-case basis and clarification will become evident.

In response to the challenge to confirm income levels for BFS clients who do not have traditional income confirmation documents: for the last couple of years, we have requested bank statements as a means of doing so. That will not change. 

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